The number of loans in forbearance nationwide decreased 14 basis points to 3.26% of servicers' portfolio volume as of August 8, 2021, from 3.40% in the prior week, the Mortgage Bankers Association said.
The MBA’s latest Forbearance & Call Volume Survey, released Monday, estimates that 1.6 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 5 basis points to 1.69%, while Ginnie Mae loans in forbearance decreased 23 basis points to 3.95%.
The forbearance share for portfolio loans and private-label securities (PLS) decreased 32 basis points to 7.05%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 17 basis points to 3.46%, and the percentage of loans in forbearance for depository servicers decreased 13 basis points to 3.36%.
"The largest decrease in a month in the share of loans in forbearance came from a jump in forbearance exits, as many homeowners are nearing the end of their forbearance terms," said Mike Fratantoni, MBA's senior vice president and chief economist. “The forbearance share declined for all investor and servicer categories."
He added that new forbearance requests “picked up slightly this week, particularly for Ginnie Mae loans, but overall trends remain positive. Incoming data continues to support our forecast of an improving job market in the months ahead.”
Other key findings of MBA's Forbearance and Call Volume Survey, conducted Aug. 2-8, 2021:
- By stage, 9.7% of total loans in forbearance are in the initial forbearance plan stage, while 82.8% are in a forbearance extension. The remaining 7.5% are forbearance re-entries.
- Total weekly forbearance requests as a percent of servicing portfolio volume increased relative to the prior week, from 0.04% to 0.06%.
Of the cumulative forbearance exits for the period from June 1, 2020, through Aug. 8, 2021:
- 28.2% resulted in a loan deferral/partial claim.
- 22.7% represented borrowers who continued to make their monthly payments during their forbearance period.
- 16.1% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
- 13.2% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 11.0% resulted in a loan modification or trial loan modification.
- 7.4% resulted in loans paid off through either a refinance or by selling the home.
- The remaining 1.4% resulted in repayment plans, short sales, deed-in-lieus, or other reasons.
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